DE000A3GSUD3 | VanEck Solana ETN
The ETN is collateralized by physical holdings of Solana which means that investors have exposure to the actual cryptocurrency rather than just a derivative. This provides investors with a level of security and transparency not found in other cryptocurrency investment products.
The expense ratio of 1.50% p.a. may seem high compared to traditional investment options, but it is in line with other cryptocurrency products on the market. Additionally, investors should consider the potential upside of investing in a cryptocurrency that has the potential to disrupt the existing blockchain ecosystem.
While the VanEck Solana ETN is a relatively small product with just 6m Euro assets under management, it is backed by a reputable provider with a long history in the ETF and ETN space. It is also domiciled in Liechtenstein which provides investors with some additional regulatory protections.
For investors looking to diversify their cryptocurrency holdings, there are other Solana ETNs available on the market including the 21Shares Solana ETP, CoinShares FTX Physical Staked Solana, ETC Group Physical Solana, and WisdomTree Solana. It is important to do your own research and consider your risk tolerance before investing in any cryptocurrency product.
ISIN
DE000A3GSUD3
Asset class
Cryptocurrencies
Trading currency
EUR
Replication
Physical (Physically backed)
Distribution policy
Accumulating
Domicile
Liechtenstein
Ticker
VS0L.XETRA
One year low/high
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What are ETFs?
An ETF (Exchange Traded Fund) is an investment fund that tracks the performance of a market index or a basket of assets. ETFs are publicly traded and can be bought and sold during normal trading hours like common stock.
ETFs have many advantages over other forms of investment, such as the possibility of obtaining portfolio diversification in a simple and convenient way, the low cost of management and the transparency of their activities. Furthermore, ETFs are often used as risk hedging instruments or to track specific markets or sectors.
In summary, ETFs are an easy and convenient way to invest in a variety of assets, such as stocks, bonds, commodities and more, without having to purchase individual investment items.
What is the TER?
The TER (Total Expense Ratio) is a measure of the cost of running a fund or ETF. This is a percentage that represents the portion of the fund's income that is used to cover management and other operating expenses. For example, if a fund has a TER of 2%, this means that 2% of the fund's income will be deducted each year to cover management and other operating expenses.
The TER is calculated by dividing the total amount of fund expenses by the fund's net assets, multiplied by 100. The fund's net assets are the total amount of the fund's assets, less liabilities.
The TER is an important measure to consider when evaluating the different funds available in the market, as it can have a significant impact on a fund's returns over the long term. For example, a fund with a high TER will have more of its returns going towards management fees, which could reduce net returns for investors. Consequently, it is important to compare the TER of different funds to evaluate which might be the most appropriate choice based on your investment needs.
What does the volatility of an ETF represent?
The volatility of an ETF represents the amount of fluctuations or changes that the price of an ETF can experience over a given period of time. In other words, volatility measures the variability of an ETF's price over time.
ETFs that invest in more stable assets, such as government bonds or fixed income securities, tend to have lower volatility than ETFs that invest in riskier assets, such as stocks. However, the volatility of an ETF can also be influenced by other factors, such as the performance of financial markets, general economic conditions and monetary policies.
Volatility can be a useful indicator for investors, as it can give an idea of the potential risk associated with an ETF. However, it's important to note that volatility isn't the only factor to consider when evaluating an ETF. Investors should also consider other factors, such as the investment objective, risk profile and historical performance of the ETF.
How does an accumulation ETF work?
Accumulating ETFs are a type of ETF that do not distribute the dividends and interest earned on the stocks they invest in to investors. Instead, this income is reinvested in the fund, helping to increase the value of the ETF shares. Accumulating ETFs are often used by investors looking to build their wealth over the long term, as reinvesting income can contribute to more growth in the value of the shares over time.
How do accumulation ETFs work in practice? Let's imagine that an accumulation ETF invests in stocks that pay a dividend of $1 for each share held. Instead of paying out these dividends to investors, the fund will reinvest this money by buying new shares of the same ETF. This will increase the number of units owned by the investor and, consequently, also the value of the units.
It is important to note that accumulation ETFs can also generate management fees, like most ETFs. These fees are typically charged to cover costs associated with managing the fund, such as buying and selling securities and paying fund administrators.
Accumulation ETFs may be a good choice for investors who are looking for an easy and affordable way to invest in a broad basket of stocks and who want to use income reinvestment to increase the value of their portfolio over the long term. However, it is important to consider the possible costs associated with accumulation ETFs and whether they are suitable for your investment needs.
What are physically replicated ETFs?
Physically replicating ETFs are a type of ETF that aim to replicate the performance of an index or basket of securities by physically purchasing the same stocks or bonds in the reference index or basket. In this way, physically replicated ETFs offer investors an easy and convenient way to gain exposure to a large basket of stocks without having to buy each individual stock directly.
Physically replicated ETFs are passively managed, which means they do not actively seek to beat the performance of the benchmark index or basket. Instead, their goal is to track the performance of this index or basket as closely as possible. This makes them a popular choice for investors looking for an easy and convenient way to invest in a large basket of stocks without having to closely monitor the financial markets.
Physically replicated ETFs can be divided into several categories based on the type of securities they invest in, such as stocks, bonds or commodities. They can also be classified according to the geographic region or industry in which the securities are issued.
Physically replicated ETFs are a popular choice for investors looking for an affordable way to gain exposure to a large basket of stocks without having to buy each individual stock outright. However, it is important to consider any costs associated with physically replicated ETFs, such as management fees, and whether these are suitable for your investment needs.